Equity — Unjust enrichment — Deceased and applicant entering into
post-separation oral agreement that deceased would maintain applicant
as beneficiary of his life insurance policy and that applicant would continue to pay premiums — Deceased and respondent forming relationship and living together for 13 years until deceased’s death — Deceased
revoking designation of applicant as beneficiary and designating
respondent as irrevocable beneficiary under policy — Applicant not
advised of change and continuing to pay premiums — Application judge
finding that applicant was entitled to proceeds of policy as oral agreement amounted to equitable assignment by deceased to applicant of his
equitable interest in proceeds — Application judge erring in relying on
doctrine of equitable assignment as that doctrine was not pleaded or
argued — Respondent not unjustly enriched as irrevocable beneficiary
designation provisions of Insurance Act provided valid juristic reason
for her receipt of insurance proceeds — Circumstances of this case not
providing basis for “good conscience” constructive trust in favour of
applicant — Insurance Act, R.S.O. 1990, c. I.8.

The applicant was the named beneficiary of the deceased’s life insurance policy
during their lengthy marriage. After they separated, the applicant and the
deceased entered into an oral agreement that the deceased would maintain
the applicant as his beneficiary and that the applicant would continue to pay the
premiums. The deceased formed a relationship with the respondent after separating from the applicant, and they lived together in the respondent’s apartment
until the deceased’s death 13 years later. Both had disabilities, and they were
supportive of each other. The deceased executed a change of beneficiary form and
made the respondent the irrevocable beneficiary under the policy. He did not
advise the applicant of the change, and she continued to pay the premiums. After
the deceased’s death, the applicant claimed entitlement to the insurance
proceeds. She asserted that the respondent would be unjustly enriched if she
received the proceeds, asked the court to impose a constructive trust on the proceeds in her favour and invoked the doctrine of unjust enrichment. The application judge ruled in her favour. He found that the oral agreement between the
deceased and the applicant took the form of an equitable assignment to the
applicant of the deceased’s equitable interest in the proceeds, or alternatively, of
his entire interest in the policy, in return for her agreement to pay the premiums
in the future. The respondent appealed.

Held, the appeal should be allowed.

Per Blair J.A. (Strathy J.A. concurring): The application judge erred in relying
on the doctrine of equitable assignment, as that doctrine was neither placed in
issue nor argued before him. Because the record was not created on the basis
that the parties had joined issue on the ground of equitable assignment, the
application judge’s findings with respect to it were unreliable and had to be set
aside. Absent equitable assignment or another exceptional circumstance to a similar effect, the irrevocable beneficiary designation provisions of the Insurance
Act operated to provide a valid juristic reason for the respondent’s receipt of the
insurance proceeds, making a finding of unjust enrichment unavailable. There